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Public Works is UNISON Scotland's campaign for jobs, services, fair taxation and the Living Wage. This blog will provide news and analysis on the delivery of public services in Scotland. We welcome comments and if you would like to contribute to this blog, please contact Dave Watson d.watson@unison.co.uk. For other information on what's happening in UNISON Scotland please visit our website.

Friday, 20 September 2013

Government spending in Scotland

The highly respected Institute of Fiscal Studies has produced a useful briefing on public spending in Scotland.

If we ignore the spin both sides of the referendum campaign have put on the report, it does give us a better understanding of Scotland's financial position. Some of the key points include:

Government spending in Scotland is around 9.3% of government spending in the UK, substantially higher than Scotland’s 8.4% share of the UK population. This means that spending per person in Scotland (£12,629) was 11% higher than for the UK as a whole (£11,381).

Spending as a proportion of GDP in the UK is 45.5%. Scotland ranges from 50.6% down to 42.7%, depending on how you allocate North Sea oil revenues. While this shows that Scotland more than pays its way in the UK - Scotland is also very sensitive to the level of economic output generated in the North Sea, which does vary significantly over time. The report highlights the OBR projections of falling oil revenue and a consequential £5.9bn 'black hole', equivalent to a 15% spending cut. However, oil revenue projections are notoriously unpredictable.

Household income in Scotland is a little (4%) above the UK average, but with wide variations between high and low income areas.

Spending on public services was £7,932 per person in Scotland, 16.6% (£1,128) higher than the £6,803 spent on average across the UK. In contrast, spending on benefits and tax credits was only a little higher per person. The higher spending is largely on devolved services. Revenue spending is 12.5% higher than the UK as a whole, whilst capital is 48.2% higher. This reinforces the point we were making to the Economy Committee this week on the risks of shifting revenue to capital.

There are significant differences in spending patterns in Scotland compared to the rest of the UK. We spend twice as much on agriculture and three times as much on enterprise and development. Ten years ago the pattern of spending was similar and this reflects different spending priorities in Scotland. Health and education have had smaller than average increases.

Since the introduction of austerity in 2010, Scottish cuts have been in similar areas to the rest of the UK. One exception is spending on housing and development.

Overall, a very useful study.

1 comment:

  1. A very low Yes vote in 2014 represents a potential long-term threat to the Scottish budget- Unison needs to be careful on this issue.

    Fiscal autonomy within the UK without oil rights also represents a fiscal threat.

    Will need to take a look at the report, but higher capital spending might partly reflect Scottish Water's public ownership

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